It seems strange that Otto's reports state that it wants to...

It seems strange that Otto's reports state that it wants to remain focused on developing it's prospects in the Philipines, then farms out and sells assets at seemingly low prices to do so, ( eg SC51 for $1.5m) and then provides $1.3m to Swala in funding!!

See below

Here is the extract from Otto's 2010 December Quarterly Report posted 31 Jan 2011.

"Otto has executed a farm-out agreement with SWAN Oil and Gas Ltd to participate in the drilling of Duhat-1
and SWAN will contribute US$1.5m to the drilling of this well in return for 40% equity in the Northern Block
and 80% equity in the Southern Block.
Otto has elected to not participate in the Southern block of SC 51, which includes the Argao prospect. Otto
will retain a 40% working interest in the Northern block."

And further down the page

BUSINESS DEVELOPMENT
"Otto has initiated a focused program of business development targeting entry into new opportunities within
South East Asia, Australasia and East Africa. This program aims to deliver high quality new exploration,
development and production opportunities in which Otto has competency in securing competitive fiscal and
commercial terms or can make use of its technical skills.
The first of these business development opportunities has seen Otto execute an Area of Mutual Interest
Agreement (AMI) with Swala Energy Ltd. This provides Otto access to Swala personnel with significant
working knowledge of the East Africa oil and gas industry and can assist with gaining entry to opportunities in
the region. The agreement is for 12 months with an option to extend for another 12 months and will see Otto
contribute the first US$1.3m in funding , expenditure above this level to be funded 50/50 by each of Swala
and Otto."

To me, this does not seem like a sound business decision and one that needs to questioned along the lines " Why has the board, after accepting a seemingly low price for Sc51, then used all but $200,000 of the sale price to give to a Company outside of Otto's business focus, and what, if any is the benefit to shareholders?

IMO DYOR.